The state may be on the hook for a multimillion-dollar payout if nearly 40,000 state employees are laid off during a government shutdown this summer.
Most state employees would have to be paid severance as well as cash for unused time off, according to union contracts. Those payouts could easily cost the state millions.
For state employees, the prospect is very real. On Friday, 36,000 state employees will get layoff notices that could go into effect July 1 if the governor and Legislature do not agree to a two-year budget by then.
It would be "the largest layoff in the state's history," said Jim Monroe, executive director of the Minnesota Association of Professional Employees (MAPE).
The prospect of paying out a lump sum to employees, at a time when the state lacks a budget and has a $5 billion projected deficit, may be daunting. But that's what the employees' contracts require, say leaders of the state's two biggest state employee unions.
"If the state shuts down July 1, the payout would be included in July 15th paychecks," said Eliot Seide, executive director of the American Federation of State County and Municipal Employees Council 5. About 18,000 state workers who may be out of work in a summer shutdown are AFSCME members.
Jim Schowalter, the state's Management and Budget commissioner, said Thursday that he was not sure how much those lump sums would cost the state, nor did he confirm that they would be required.
"I don't want to give people half an answer. I don't want to give you what could happen at this point," he said. "I do understand that's an important issue for employees and we are going to get it solved."